Module 1 What is Negotiation? Alternative Methods of Making Decisions
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- Module 6 Bargaining for an agreement
- Linked trading
- The agreement
- Module 7 Styles of negotiation
- The Negotiator’s Dilemma
- The Prisoner’s Dilemma
Summarizing tradablesWe trade because we value things differently (in preparation categorized in high, medium, low) and the things we trade are tradables. Valuations we made in preparation will need to be amended or modified. With the information gained during the debate phase and any proposals, the other side’s tradables should be reassessed. List of all proposals Make a list of all proposals. The list is an indicator of how big the gaps are on the tradables, or whether there are overlaps with your exit point for any of the currently mentioned tradables (there may be other potential tradables which you have not yet raised and for which, obviously, you have no information on exit or entry points). Summarizing of proposals In debate we summarize what people have said to each other; in proposing we summarize what each has proposed. The summary after each proposal introduces an element of order into our interactive chaos (manage the untidiness and your proneness to error). It also sets up the bargaining phase or invites new proposals. It creates the possibility of either negotiator moving from tentative conditional proposals (i.e. conditional vague offers) to the bargain (i.e. conditional specific offers), if it doesn’t work go right back into debate. If central inhibitions have not yet been addressed, new proposals are required. Module 6 Bargaining for an agreementFrom Proposals to BargainingThe Bargaining Phase is the fourth and final phase. A bargain is ALWAYS a specific condition linked to a specific offer. There is no room for ambiguity, state exactly what you want and exactly what you offer: if you do such and such, then I will do so and so. The result is either agreement or a return to the Proposing Phase. Difference between a proposal and a bargain:
The effective bargain moves a proposal to conclusion. Preferred language: ‘if’ and ‘then’ ‘If you do such and such, then I will do so and so’.
The offering of a bargain is not necessarily the end of the matter--they are subject to the same process of consideration (debate, propose, bargain). Linked tradingIf we negotiate because we value things differently, it is in the bargaining phase that we focus on the differing valuations. Nothing, absolutely nothing, should be given away, no matter how little it is worth to you. The paradox of bargaining is that those things that are worth little, or less, to you in themselves, could be worth a great deal to you in the bargaining phase if they are worth more to the other negotiators. The form of the bargain is the conditional offer, and the tradables available to the negotiators are the potential content of the conditional offers. Tradables widen the focus of a negotiation; the more tradables, the easier it is to avoid deadlock. Two tradables linked together into a bargain, each valued differently by the other, could lead to a breakthrough. Creating lists of tradables - properly a task of the preparation phase, but also a task when stuck in the bargaining phase, where its significance is more easily recognized – is only part of the creative work of the negotiator. The bargainer has to use them effectively and timeously. The key to the effective use of tradables is always to link them together, using movement on one as a condition of movement on another, or the introduction or acceptance of a new one as a condition of accepting those already on the table. By linking their conditional offers across each tradable they engage in what has been described as a ‘negotiation dance’. Bargaining to Close the Deal To offer a bargain is to call for a close to the negotiation. It is an explicit statement of agreement that you are prepared to settle without further elaboration. Traded concession bargains – helps a bargain over the last final hurdle –––– the final movement for the deal–– These can take many forms (usually relatively small items/ quantity, and often less intangible). Summary bargain – everything previously proposed is summarized as a bargain –– and a deal is asked for. The repetition of summary bargains or the refusal to consider further small movements usually leads to the or else bargain (the take it or leave it, it’s my final offer). offered smugly can lead to disaster offered with sincerity reflects the urgency of settling there and then The adjournment bargain – uses the summary bargain with a twist – let's sleep on it... let's table the matter until morning... let's meet again on Friday... The risks in the adjournment: when out of your presence, rivals may offer them a better deal, they may have second thoughts...
an agreement, or a failure to agree Since "nothing is agreed until everything is agreed", extreme caution must be taken to ensure that the parties actually understand just what it is that they have agreed to! Regular summarizing of statements, proposals, and bargains is a must! Verbal restatement, writing it up there and then. In this phase, closing ploys are sometimes used to get a better bargain in the euphoria of pending agreement (see Streetwise Manipulation). Module 7 Styles of negotiationMuch of the success of negotiations depends on a willingness to co-operate and if there is trust between the parties. Lack of co-operation and trust leads to negotiating behavior that is not useful when attempting to reach agreement. This is caused because there are incentives to defect from co-operation, or when lack of trust ‘forces’ one party to ‘play safe’ and defect and so minimize risk. In a series of transactions, spreading risk minimizes the chance of defection, because until the last transaction there is an incentive to co-operate. Outcome is often dependent on each parties simultaneous choice between co-operate and defection. Win-win depends on simultaneous co-operation. Lose-lose is the opposite. Trust is based on what people do and have done, not on what they say they will do. The Negotiator’s DilemmaThe negotiator’s dilemma is the occurrence of no-co-operative behavior whilst co-operative behavior leads to the best results. It is best illustrated with the Prisoner’s Dilemma, illustrating why lack of trust between two parties causes the parties to make decisions which are not in the best interest of either of them. The Prisoner’s DilemmaTwo prisoners are charged with murder, but the magistrate cannot prove it from the evidence available and needs a confession. In order to secure a confession, he separates the prisoners so that they cannot co-ordinate their response, and have to rely on trusting the other prisoner to co-operate at the same time, and he offers them a deal: You can confess or plead not guilty If you both confess, you will both get 10 years in prison If you both plead not guilty, you will both get a 3 year prison sentence If you confess and the other pleads not guilty, you will go free But if you plead not guilty and he confesses, you will get 20 years and he will go free  The decision of the prisoners now depends on what they think the other prisoner will do: both pleading not guilty is the best overall solution, but means risking 20 years; confessing means a maximum sentence of 10 years. They confess, because they do not trust the other party to plead not guilty.
The success of the prisoner’s dilemma lies in the fact that they cannot co-operate and have to rely on what they think the other does. The magistrate’s success is that he can secure convictions, because the prisoner’s irrational behavior interferes with their best interest. The Prisoner’s dilemma is whether to do what is best for your self or best for both of you. Download 0.61 Mb. Share with your friends:
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